The Texas Tech Alumni Association will likely lose $525,000 from the Raider Park parking garage lease agreement because of faulty information from a marketing company — a mistake the Red Raider Club warned against, Terry Fuller, president of the Red Raider Club, said.
Fuller said if a donor gives the Red Raider Club $2,500 to $4,000 for a student athlete scholarship fund, they become eligible to park on the west side of the stadium. He said the alumni association, when projecting revenue from the garage, assumed the $2,500 to $4,000 spent would go directly toward a parking space.
“The Texas Tech Alumni Association became involved in that project with the thought process that it would be a money-making opportunity if they could sell those parking places (in Raider Park parking garage) on gameday like the Red Raider Club,” Fuller said. “That’s the fallacy of what happened there.
“There was some thought process that the Red Raider Club actually sold parking places, and that misinformation was presented to the alumni association.”
A donor to the university, who wished to remain anonymous, said the information presented to the alumni association about how the Red Raider Club allocated parking spaces was ignored by a powerful coalition of members, all of whom belong to the Phi Delta Theta fraternity.
The Red Raider Club did not agree to get involved with the original lease agreement because they did not want to use potential scholarship money on a parking garage. Fuller said if the Red Raider Club had gotten involved, he would have regretted it.
“I find that disgusting,” Fuller said. “I cannot live with myself looking in the mirror every morning knowing I took advantage of my university to the tune of half a million dollars a year.”
He said the misunderstanding led to an enormous fluctuation in the price of the parking spots at Raider Park parking garage. The alumni association, with the thought of being able to sell the parking spaces for roughly $1,500, was sorely disappointed when it sold fewer than 100 spots.
The alumni association asked the Red Raider Club and University Parking Services to take over the marketing and selling of both game day and student parking in May.
University Parking Services lowered the prices, which provided more affordable parking for students but, at the same time, reduced potential revenue for the alumni association and Tech, making it impossible to break even.
Another error that led the alumni association into this agreement was the assumption it could pay for a parking garage with only six football games a year, Fuller said.
“Short term, you can’t possibly think you’re going to pay for a parking structure with six football games a year,” Fuller said. “That’s just ridiculous to even think that that’s a possibility.”
Tech Chancellor Kent Hance and Tech attorney Russell Thomasson maintain this deal was not solely about creating more gameday parking. They said Tech entered into the agreement to gain more student parking and to prepare for future enrollment growth.
Heather Medley, marketing and training coordinator for University Parking Services, said the university did not immediately need more student parking, and parking services did not request more student parking from the university.
“(The parking garage) was a university decision,” Medley said. “It wasn’t a choice. We were just kind of told to do it. They wanted it for gamedays and other things.”
University Parking Services is currently conducting research on building another on-campus parking garage. The parking garage on Flint Avenue and 19th Street provides the university with 791 parking spots and cost $10.5 million.
John Sims, a Lubbock attorney and general counsel for the alumni association, said the Raider Park parking garage is costing Tech and the alumni association some $750,000 per year for 1,000 spots, but at the end of the lease, they will be no closer to owning the garage.
Thomasson said one major reason Tech found Raider Park parking garage desirable was because of its location. He said the garage is the best alternative to the Commuter North parking lot. However, 1,022 people remain on the waiting list for Commuter North despite roughly 650 parking spots being available at Raider Park parking garage.
According to the lease agreement, University Parking Services will receive the first $50,000 of revenue from student parking as compensation for their marketing expenses. So far this year, student parking has generated less than $40,000 in revenue. The Red Raider Club will receive the first 10 percent of game day revenue, which was less than $10,000 for 2010 and likely to be less than $20,000 for 2011.
Neither University Parking Services nor the Red Raider Club appear to be losing money in the lease agreement with Raider Park Limited Partnership.
University Parking Services spent $1,737 on advertising, and both organizations took advantage of free advertising across social media, emails and TechAnnounce.
“The Red Raider Club was offered an opportunity to make a financial commitment to that parking garage, but declined to do so,” Fuller said. “The Red Raider Club has no investment in that parking garage, but the alumni association does and that’s why they’re in a different situation.”